Determination of eligibility of input service credit on various input services.

PJ/Case Laws/2012-13/1485

Case:- M/s GOLDEN TOBACCO LTD Vs COMMISSIONER OF CENTRAL EXCISE, MUMBAI-I

Citation:- 2013-TIOL-163-CESTAT-MUM

Issue:- Determination of eligibility of input service credit on various input services.

Brief Facts:- The appellant are in appeal against the impugned order where input service credit has been denied on the premise that the same does not qualify under Rule 2(1) of the CENVAT Credit Rules, 2004.

Respondent Contentions:- The appellant submitted that the issue involved is in a narrow compass, therefore after waiving the requirement of pre-deposit, the appeal itself was taken for final disposal. In this matter, the appellant has availed input service credit to the following services:-
1. Service provided for valuation of property other than factory premises by various provider
2. Service provided in relation to empty plot at Roha by various service providers like Naaz
   Agencies and Top Security
3. Bill of various club house like M/s. Garware club and M/s. M.C.A
4. Credit card and Diners club bill in name of employees
5. Repair & Maintenance of Air conditioner provided at Res. Employees
6. Audit of M/s. Golden Investment Scheme and other related companies by service provider like
    M/s. Kay & Co., B.K.Sethi Co. and Gee Vee Construction
7. Services like rent a cab etc. rendered to various other places other than their factory and declared
    warehouse/depot.
On the above services, input service credit was denied to the appellant on the premise that same does not qualify under Rule 2(l) of the CENVAT Credit Rules, 2004.

Reasoning of Judgment:- Tribunal has considered the submissions from both sides. The fact that out of seven services, the appellant are entitled for input service credit with regard to rent-a-cab service as input service credit of Rs.8,75,107/- as per the decision of the Hon'ble High Court of Bombay in Ultra Tech Cement 2010 (260) ELT 369 = (2010-TIOL-745-HC-MUM-CX) wherein the Hon'ble High Court has held that any service availed by the assessee (who is a manufacturer of excisable goods) in the course of their business is entitled for input service credit. Admittedly, rent-a-cab service has been used by the appellant from their factory to going to the warehouse, factory and depot. Therefore, they are entitled for input service credit qua rent-a-cab service. Input service credit for the remaining six services which are not availed by the applicant in the course of business of manufacture is denied. As the appellant has not paid the input service credit availed on these services despite the order passed by the lower authorities, therefore, the penalty of Rs.2000/- is confirmed. With these observations, the appellants are directed to make payment of input service credit which is not entitled along with interest and penalty of Rs.2000/- within 30 days of the communication of this order.

Decision:- In these terms, appeal as well as the stay application are disposed of.

Comment:-The substance of this case is that input service credit is admissible only of those services that are clearly availed during the course of manufacture of dutiable final products.

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PJ/Case Laws/2012-13/1485

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